Federal policies and proposed actions are creating significant barriers to mental health care access during a period of unprecedented mental health challenges. On January 13, 2026, the Substance Abuse and Mental Health Services Administration (SAMHSA) terminated hundreds of grants supporting mental health and substance use disorder services, totaling approximately $2 billion. Following immediate bipartisan pushback and advocacy from the mental health community, the funding was reinstated on the evening of January 14.
Major Funding Threats
The federal-state Medicaid program accounts for one quarter of all U.S. spending on mental health and substance use disorder treatment services. H.R. 1, the “One Big Beautiful Bill Act,” passed July 4, 2025, cut federal funding for Medicaid by 15%, or $1 trillion, over 10 years. The nonpartisan Congressional Budget Office estimates that these cuts will result in 11.8 million individuals directly losing their health insurance coverage under Medicaid, and an additional roughly 3.1 million people losing Medicaid coverage under marketplace plans. Since states are not required to cover behavioral health services in their Medicaid programs, major cuts in federal support will inevitably result in loss of access to care.
The Department of Health and Human Services has proposed restructuring federal mental health agencies and reducing their funding in the President’s FY26 budget. This includes dissolving SAMHSA and the Health Resources and Services Administration (HRSA), consolidating them into a new Administration for a Healthy America. The proposed restructuring includes a $1 billion cut to these programs. Congress would need to approve the proposed restructuring and funding changes for them to go into effect.
Insurance and Parity Challenges
On May 12, 2025, the administration announced that it will not enforce Biden-era mental health parity regulations that strengthened requirements for insurers to provide equivalent coverage for mental and physical health conditions. These regulations, finalized in September 2024, were set to take effect starting on January 1, 2025, but faced a legal challenge from the ERISA Industry Committee representing large employers. Recent research indicates that insurance reimbursements for behavioral health visits are on average 22% lower than for medical or surgical office visits, creating a disincentive for providers to join insurance networks.
Additional federal actions include reduced funding for LGBTQ+ crisis services through the 988 Suicide & Crisis Lifeline, the halting of $1 billion in school mental health professional grants by the Department of Education, and return-to-office mandates for VA mental health providers that have compromised confidential care delivery in facilities lacking adequate private spaces.
Economic Impact
Untreated mental illness carries substantial societal costs. A recent cross-sectional study found that untreated mental illness cost Indiana $4.2 billion in direct, indirect, and societal costs—approximately one percent of the state’s gross domestic product.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://updates.apaservices.org/new-policies-affecting-access-to-mental-health-care